Contemporary U.S. headlines are irritatingly familiar
to those of us who grew up in post-World War II Britain.
Balance-of-payments problems. Allegedly short-sighted
management. Lack of international competitiveness. Decay
of basic industries. And, much-advocated if so far
fortunately unenacted, the need for an "industrial
strategy." Has the British disease pursued us across the
Atlantic?

The implied answer in Corelli Barnett's acerbic
"The Pride and the Fall: The Dream and Illusion of
Britain as a Great Nation" (Free Press, 359 pages,
$22.95), is no — at least, not yet. Mr. Barnett's
British title, changed here in the mindless and
magniloquent manner of publishers, was "The Audit of
War." That's a much fairer description of his
exhaustive review of Britain's industrial performance
during World War II. Although this performance was the
object of much self-congratulation in 1945, Mr. Barnett
concludes that it was actually artificially stimulated
by American financial and technical transfers, and that
the symptoms of subsequent failure were already
apparent.

In mortal competition with Germany, Mr. Barnett
argues, every major British industry turned out to be
like the steel industry: "a patched-up and added-on
relic of Victorian and Edwardian technology." All were
fragmented, technologically conservative, infested with
labor unions and chronically underproductive by German
and American standards.

Worse, new sectors such as the aircraft industry,
which grew from 35,000 employees in 1935 to 1.75 million
in 1943, rapidly developed the same symptoms. A
legendary triumph like the Spitfire fighter had the
hidden disadvantage of requiring two to three times the
man-hours to manufacture as its German competitor, the
Messerschmitt 109. Although downplayed by wartime
propaganda, labor disputes were continuous. Sheet-metal
workers, for example, insisted that power-press
operators working on Spitfire fuselages be paid hand
craftsmen's rates.

The appalling result was that in 1944 productivity in
Britain's aircraft industry lagged significantly behind
Germany's, even though the latter had been forced to
disperse its plants because of merciless Allied bombing.
During the war, Britain managed to develop and produce
in quantity only one new aircraft type, the Mosquito
fighter-bomber, again in contrast to Germany, which
developed four new planes and several radical design
innovations.

Today, the U.S. presents a rather different story.
While relinquishing some traditional industries, it has
seized unequivocal world leadership in newer areas, like
high technology (and some services — like rock music).
It still has a strong resource base and relatively weak,
and weakening, labor unions. Moreover, the takeover and
restructuring ferment threatens complacent managers,
even supposing they have not already been inspired by
the spectacle of 30-year-old millionaires in the
computer and securities businesses.

Mr. Barnett's explanation for Britain's decline is
essentially cultural. The working class was brutalized
by the Industrial Revolution, he says, and the upper
classes were seduced by visions of pre-industrial
gentility. Technical education was neglected and
Britain's postwar loans were diverted into grandiose
"New Jerusalem" social programs instead of industrial
revival. Mr. Barnett views the moralistic contribution
of the Christian churches with a particular contempt.

This theory is disturbingly unsystematic, besides
hinting at solutions like protection and enlightened
government intervention that were tried, disastrously,
by socialist governments in the 1960s. It does not
really consider conditions elsewhere in Europe, although
the proletariats there became much more alienated and
revolutionary. And it completely neglects economic
factors like marginal rates of personal income tax and
the burden of government spending. As Alvin Rabushka
argues convincingly in his recent "From Adam Smith to
the Wealth of America," when marginal rates began to
rise sharply after 1880, incentives in Britain were
radically and fatally reduced. By this measure too, the
U.S. is still ahead of most of the world.

It would be unwise, however, to dismiss cultural
factors too dogmatically. People do not always respond
in the same way to incentives, a fact illustrated by the
differing performances of the various immigrant groups
in the U.S. Human organizations do seem to age, as the
parabolic fortunes of many great American corporations
suggest. And it is notable that recent scholarship has
uncovered remarkably similar contemporaneous complaints
about the timidity and deteriorating effectiveness of
the British Army by the time of the invasion of Europe
in 1944.

Refugees from Britain often incline to the view that
their motherland's implosion is partly due to the steady
emigration, for the last two centuries, of its most
enterprising individuals — such as themselves. Mr.
Barnett's book, like most British discussion, neglects
this important dimension. But there was heavy emigration
from Germany also. The decline of nations, like their
rise, remains ineffable.